​Creating deep integrations between the HR expertise methods a corporation makes use of may be the distinction between reaching a powerful return on funding from these expertise investments and being plagued with pricey errors brought on by guide information entry, poor worker experiences and sluggish information sharing.

HR and advantages leaders can choose to attach their expertise platforms utilizing both utility programming interfaces (APIs) or the legacy observe of flat-file information transfers. While the latter technique stays viable in some eventualities, expertise analysts say utilizing APIs brings a important degree of velocity, accuracy and enhanced consumer expertise that is typically sorely wanted in an atmosphere that continues to depend on dated platforms and practices.

Research reveals HR tech customers lag behind different departments in adopting next-generation APIs to attach disparate methods. Experts say many HR leaders additionally want to raised educate themselves about APIs to allow them to have better-informed discussions with distributors concerning the expertise. Some distributors, for instance, wrongly label their integrations as true APIs—both due to misunderstanding or as a advertising and marketing ploy.

Weighing APIs vs. Flat-File Integration

Using APIs to attach HR methods quite than utilizing flat-file transfers—the latter can be generally referred to as safe file switch protocol (SFTP) integrations—has an a variety of benefits which have escalated in significance as HR features add extra specialised platforms and apps to their expertise stacks.

In a flat-file switch, HR information are uploaded onto a server after which downloaded by the recipient on the identical server. While this observe can nonetheless be the best choice for organizations utilizing older, on-premise software program to course of a number of bulk information, it has more and more restricted functions.

APIs remove the necessity for guide information entry, which is required with flat-file integrations, and scale back the possibility of error that comes with copying and pasting information between functions. Another massive benefit of APIs is velocity. Data is shared instantaneously between methods, and data are up to date in actual time. APIs are particularly essential in instances the place speedy information motion is crucial to safety, agility, privateness or the worker expertise, mentioned Mark Stelzner, founder and managing principal of IA, an HR advisory agency in Atlanta.

“For example, if an employee logs into the company’s benefits administration system and sees a tile representing their 401(k) balance, it might be confusing if the data presented doesn’t match what they see when logging directly into the 401(k) provider’s mobile app or website,” Stelzner mentioned.

APIs additionally add important velocity to processes like onboarding, throughout which a seamless connection between a number of platforms is essential to the speedy and orderly completion of latest worker orientation duties. APIs additionally enable for fast information sharing between HR and different enterprise methods like finance, gross sales or procurement, connections which have excessive worth for forecasting duties like headcount planning or setting budgets.

HR Tech Lags in API Use

Despite the benefits of APIs, analysts say HR continues to lag different organizational disciplines in utilizing the expertise to attach its burgeoning variety of platforms.

“I believe we are easily 10 years away from APIs being ubiquitous in the HR and benefits technology industry,” mentioned Rhonda Marcucci, vice chairman of innovation for Gallagher, a HR and advantages expertise consulting agency in Chicago. “That’s because many of the players are in different places on their digitization journey, and APIs require both the sending and receiving party to have the same set of protocols in place.”

Marcucci mentioned some of the essential issues HR and advantages leaders can do relating to APIs is educate themselves in three key areas relating to how their information is transmitted from system to system.

“They should understand the timing of updates, how errors are processed and the security of their data, whether it’s at rest or in transit,” Marcucci mentioned.

Ansel Parikh, co-founder of Finch, a supplier of API expertise in San Francisco, mentioned HR expertise stays usually extra advanced, closed and fragmented relative to applied sciences in different disciplines, making it tougher to implement APIs. But he sees cause for optimism on the horizon.

“Although adoption of APIs has been slower in employment technologies, we’ve seen a growing push from individual employers as well as vendors to improve HR technology through more modern connections between systems,” Parikh mentioned.

Analysts say there are historic challenges to increasing API use inside HR expertise ecosystems. Because IT and HR have been seen as price facilities quite than income producers, getting assets to replace legacy applied sciences and facilitate API integrations may be troublesome, particularly in smaller and midsize corporations with extra restricted assets. APIs additionally require ongoing upkeep and common updates, one other stress on the budgets of smaller organizations.

Buyer Beware: Know Your Vendors’ API Strategy

Experts say it is more and more essential for HR and advantages leaders to have an excellent understanding of the API methods employed by their expertise vendor companions. “I think the most important thing for HR leaders to ask and understand is: ‘How does this really work?’ ” Marcucci mentioned. “Much like artificial intelligence, APIs are a buzzword right now. For example, we know folks who tout they are using APIs when in fact they are sending data via flat files, or they’re sending data via an API, but the receiving partner is not processing it that way.”

Stelzner mentioned it is essential to start out with the “why” when asking distributors about their API methods. “Why has the provider elected to invest in APIs or why have they not?” he mentioned. “Why will the strategy bring value to our employees, HR and people leaders?”

Stelzner mentioned it is also important to have distributors clarify their safety requirements and the API monitoring that is in place to make sure delicate information is protected.

John Kostoulas, a vice chairman analyst specializing in HR applied sciences with Gartner, mentioned when HR leaders are contemplating how finest to combine platforms, they need to assume first concerning the weakest hyperlink of their expertise ecosystems.

“Because of aging platforms or closed architectures, there are usually weak links in a system,” he mentioned. “HR has to look at how the lack of APIs connecting critical systems impacts things like employees’ experience with technology, which plays a role in engagement and retention.”

Dave Zielinski is principal of Skiwood Communications, a enterprise writing and enhancing firm in Minneapolis.